In criminology, Subcultural Theory emerged from the work of the Chicago School on gangs and developed through the Symbolic Interactionism School into a set of theories arguing that certain groups or subcultures in society have values and attitudes that are conducive to crime and violence. The primary focus is on juvenile delinquency because theorists believe that if this pattern of offending can be understood and controlled, it will break the transition from teenage offender into habitual criminal. Some of the theories are functionalist assuming that criminal activity is motivated by economic needs, while others posit a social class rationale for deviance.

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Culture is all that is transmitted socially rather than biologically, representing the norms, customs and values against which behaviour is judged by the majority. A subculture is a distinctive culture within a culture, so its norms and values differ from the majority culture but do not necessarily represent a culture deemed deviant by the majority. A subculture is distinguished from a counterculture which operates in direct opposition to the majority culture. Cultural Transmission Theory and Social Disorganisation Theory posit that, in the poorest zones of a city, certain forms of behaviour become the cultural norm transmitted from one generation to the next, as part of the normal socialisation process. Successful criminals are role models for the young, demonstrating both the possibilities of success through crime, and its normality. See Shaw (1930) who describes the social pressure to engage in criminality. Subcultural Theory proposes that those living in an urban setting are able to find ways of creating a sense of community despite the prevailing alienation and anonymity. The cultural structure is dominated by the majority norms, which forces individuals to form communities in new and different ways. More recently, Fischer (1995) proposed that the size, population and heterogeneity of cities actually strengthens social groups, and encourages the formation of subcultures, which are much more diverse in nature compared to the general culture. Fischer defines a subculture as, "...a large set of people who share a defining trait, associate with one another, are members of institutions associated with their defining trait, adhere to a distinct set of values, share a set of cultural tools and take part in a common way of life" (Fischer: 544). In less densely populated and less diverse environments, the creation of such subcultures would be nearly impossible. But ethnic minorities, professionals, the artistic avant-garde, displaced agricultural families, etc. come to live in cities and their lifestyles come to typify cities.

Thrasher (1927: 46) studied gangs in a systematic way, analysing gang activity and behaviour. He defined gangs by the process they go through to form a group:

"The gang is an interstitial group originally formed spontaneously, and then integrated through conflict. It is characterised by the following types of behaviour: meeting face to face, milling, movement through space as a unit, conflict, and planning. The result of this collective behaviour is the development of tradition, unreflective internal structure, esprit de corps, solidarity, morale, group awareness, and attachment to a local territory."

Thrasher maintained that gangs originate naturally during the adolescent years from spontaneous play groups which get into various kinds of mischief. They become gangs when they excite disapproval and opposition, thus acquiring a more definite group-consciousness. Like Durkheim and Merton, Thrasher described how the environment can be conducive to delinquent behaviour, that gang subcultures arose in the cracks, or "interstices," of urban neglect combined with the inner cracks of identity that occur in the turbulent years of adolescence. Shaw (1930) also described delinquency as a group activity which was transmitted from older to younger boys with the streets and jails of Chicago as their classrooms. Thrasher confirmed the work of the others in the School, finding the most gangs in the zone of transition with the highest incidence of single-parent families, unemployment, multiple family dwellings, welfare cases, and low levels of education. These were the slums, the ghetto, and the barrios and he found evidence of at least 1,313 gangs with an estimated 25,000 members who found a different way to acquire an identity and status. The gangs became a youth's reference group where main values, beliefs, and goals were formed and, in a sense, also became a family, offering a sense of belonging and self-esteem.

In the earliest stages of the Chicago School and their investigation of human ecology, one of the key tropes was the concept of disorganisation which contributed to the emergence of an underclass. Analysts have viewed the ghetto as symptomatic of poverty and disorganisation, measuring the extent to which it diverges from middle-class values, representing it as a place of disorder, anomie and immorality. As the first African-American chair at Chicago, Frazier (1931) stressed the marital disruption, decadence, destitution, crime, and vice into which "Negroes" inevitably sank when migrating into the urban environment, using family structures as the determining feature of disorganisation. Two subcultural issues have emerged:

Frazier (1932) was interested to determine whether any West African customs survived in the U.S. According to the Creolists, the U.S. slave population and their descendants did not share a common culture and their customs, religious beliefs, dialects, and social structures varied too greatly to influence ethnic and cultural cohesiveness. Frazier who was of an extremely conservative creolist persuasion expounded that all cultural remnants of the indigenous culture had been destroyed in the melee of slavery and, in effect, the West African heritage had little or nothing to do with the present African American population in the U.S. Others of a revisionist persuasion, emphasised a continuity in African history and argued that there is a layering of cultures representing the diaspora populations in the New World.

Frazier (1957) continued the discussion on social distance and what he terms the "common moral order", chronicling the growing social class distinctions between moneyed African-Americans who mimic whites, and their less fortunate brethren. Frazier (1932) had noted in his history of slavery that where human relationships were established between masters and slaves, both were less likely to engage in cruelty toward each other. It is also known that debtor slaves were as a rule treated with more consideration than were foreign slaves obtained by capture and trade. This system of protective patronage continued in the relationship between white culture and the new black bourgeoisie.

Finally, Frazier discussed the question of whether the African American population was "over-churched" as a distinctive social structure. He identified five attributes of black families from a matriarchal perspective including strong achievement orientation, strong work orientation, flexible family roles, strong kinship bonds, and strong religious orientation which potentially introduced a gender bias into the subculture.

Cohen (1955) did not look at the economically oriented career criminal, but looked at the delinquency subculture, focusing on gang delinquency among working class youth in slum areas which developed a distinctive culture as a response to their perceived lack of economic and social opportunity within U.S. society. He was a student of Edwin Sutherland (Differential Association Theory and Social Transmission Theory) and Merton's (Strain Theory). The features of this subculture were:

anti-utilitarian: in many cases, there was no profit motive in thefts or other crimes. The main intention was to foster peer bonding through sharing the experience of breaking the laws.

collective reaction formation: the gang inverted the values of the majority culture, deliberately pursuing the mirror image of the American Dream.

malice: many acts of vandalism and property damage were motivated by spite, contempt, and personal intention to injure.

short-termism: the gang lived for the moment, looking for instant gratification.

group autonomy: everything was aimed at consolidating group loyalty.

Cohen (1958) explained this in terms similar to Strain Theory, (i.e. as a form of rebellion) in that education taught the young to strive for social status through academic achievement but, when most of the working class failed, this promoted "status frustration" or reaction formation, inverting middle-class values to strike back at the system that had let them down. Middle class values stress independence, success, academic achievement, delayed gratification, control of aggression, and respect for property. Lower class parents encourage different values in their children (i.e. different socialisation. In lower class families ambition and planning must give way to pressing issues of the moment. They depend more on others, and have more of a group orientation, “watching each others backs”.

Cloward and Ohlin suggested that the route to delinquency involved one of three subcultures:

Criminal: this represents Merton's Anomie Theory in which adolescents use crime for material gain. This subculture usually forms in areas where there is an established organisation of adult crime that provides an "illegitimate opportunity structure" for youths to learn the "tricks of the trade".

Conflict: when an illegitimate opportunity structure is not available, delinquents often form conflicting gangs out of frustration at the lack of any available opportunity structures.

Retreatist: this involves drug use and hustling, behaviour generally found among the "double failures" - those that cannot find acceptance in either legitimate groups or the two other subcultures.

Miller (1958, 1959) agreed with Cohen that there was a delinquency subculture, but argued that it arose entirely from the lower class way of life. There was a clear distinction in values between the two social classes. Whereas the middle class is achievement and social goal oriented, Miller thought that lower class parents were more concerned with ensuring that their children stayed out of trouble, e.g. sons avoiding fights and daughters avoiding pregnancy. Boys were expected to be tough and street-smart which gave them an incentive to join a gang. Given that their ordinary lives were boring, the excitement of crime was a welcome relief, bringing a sense of autonomy by denying the social controls imposed by the state. For the middle class, the most important institutions are family, work, and (for the child) school. For the lower class another institution plays a crucial role – the same sex peer group or gang is more important than family, work or school because it offers a sense of belonging, and a way to achieve status that they cannot easily achieve in mainstream society. Thus, delinquency was not a reaction against middle class values but rather a means of living up to their own cultural expectations for toughness and smartness. Indeed, the gang only recruited the most “able” members, so membership of a gang confirmed high status. It was simply unfortunate that the state had decided that many gang activities were crimes.

Matza (1964) argued that, rather than being committed to delinquency, young people drifted between conventional and unconventional behaviour. The initial socialisation did introduce an understanding of social expectations and a sense of guilt if those expectations were not met, but that individuals developed techniques of neutralisation to avoid feeling guilty. To some extent, society also helped to neutralise the guilt by blaming the parents for failing properly to supervise their children. Matza also argued that the search for excitement was classless. It was simply that working class youth had fewer opportunities for legitimate activities. Nevertheless, deviancy can be fun for everyone. There is a certain excitement in exercising free will and breaking rules knowing that there is little chance of being caught. This implies a degree of rational choice within structural constraints. The offenders are individuals who feel powerless. They are tired of being pushed around and simply feel like defying the system. If they are caught and come before a court, they appear victimised among their peer group and gain status.

Cohen (1972) studied the youth of East London in the early 1970s. He examined the immediate and the wider context to determine how two different youth subcultures reacted to the changes occurring in their community. He suggested that the Mod reaction was to the new ideology of affluence. They wanted to show that they had money and knew how to spend it. In contrast, skinheads looked back to the more traditional working class community. Each generation tries to find employment or adapts to unemployment. But the 1920s had very different economic circumstances to later decades. Cohen argued that youth develop a cultural style as a means of coping with their particular circumstances and of resisting the dominant values of society. This casts working class youth as the standard bearers of class struggle. There is little in real terms that youth can do to change society, but resistance offers subjective satisfaction which can be shown through style: the clothes, haircuts, music and language of the different youth cultures. Cohen argued that these styles are not meaningless, but are deeply layered in meaning. This is an application of Marxist Subcultural Theory which synthesised the structuralism of Marxism with the Labelling Theory. The approach matched that of the Centre for Contemporary Cultural Studies at Birmingham University (see Crow: 1997). This approach places emphasis on the contents of youth culture and on the differences produced by class background. The assumption is that a capitalist society attempts to achieve hegemony by using the cultural values of society for their own benefit. The domination of the adults is enforced through the system of mortgages, credit cards, and family commitments, and they are seduced into accepting the relative security of capitalism. But the youth are relatively free of long term commitment or responsibility for a family and, with many unemployed, the youth are the weakest point in the structure of hegemony.